Enterprise Group Announces Results for Second Quarter 2024

Rhea-AI Summary

Enterprise Group (TSX: E) (OTCQB: ETOLF) reported strong Q2 2024 results, with significant growth in revenue, gross margin, and EBITDA. Revenue for Q2 2024 increased 41% to $7,707,282, while gross margin grew 98% to $3,318,336. Adjusted EBITDA saw a 138% increase to $2,651,694. The company's performance was driven by favorable market conditions in the energy sector and increasing demand for natural gas power generation systems. For the first half of 2024, Enterprise generated cash flow from operations of $10,635,184 and invested $9,685,061 in capital assets. The company also completed a private placement, raising $6,999,197. Enterprise announced leadership changes, with Desmond O'Kell becoming President and Director, while Leonard D. Jaroszuk continues as Chairman and CEO.

Positive

• Revenue increased 41% to $7,707,282 in Q2 2024
• Gross margin grew 98% to $3,318,336 in Q2 2024
• Adjusted EBITDA increased 138% to $2,651,694 in Q2 2024
• Cash flow from operations reached $10,635,184 for H1 2024
• Completed private placement raising $6,999,197
• Increasing demand for natural gas power generation systems

Negative

• Significant capital expenditure of $9,685,061 in H1 2024
• Potential dilution from issuance of new shares and warrants in private placement

St. Albert, Alberta--(Newsfile Corp. - August 8, 2024) - Enterprise Group, Inc. (TSX: E) (OTCQB: ETOLF) (the "Company" or "Enterprise"). Enterprise, a consolidator of energy services (including specialized equipment rental to the energy/resource sector), emphasizing technologies that mitigate, reduce, or eliminate CO2 and Greenhouse Gas emissions for small to Tier One resource clients, is pleased to announce its Q2 2024 results.

	Three months June 30, 2024		Three ended June 30, 2023		Six months June 30, 2024		Six months June 30, 2023
Revenue	$7,707,282		$5,549,855		$20,033,570		$15,468,187
Gross margin	$3,318,336	43%	$1,679,552	31%	$10,214,681	51%	$6,778,847	44%
Adjusted EBITDA(1)	$2,651,694	34%	$1,115,876	20%	$8,989,547	45%	$5,508,558	36%
Net income and comprehensive income	$76,423		$(525,736)		$4,067,937		$2,275,599
Income per share - Basic	$0.00		$(0.01)		$0.07		$0.05
Income per share - Diluted	$0.00		$(0.01)		$0.07		$0.05

 

(1) Identified and defined under "Non-IFRS Measures".

• During the half of the year, the Company was able to build upon the momentum from 2023. Market conditions were favourable for the energy sector, resulting in additional drilling, completion, and infrastructure projects. Also, the increasing demand for natural gas power generation systems indicates a shift towards lower emission alternatives. Overall, these factors contributed to the Company's strong results in the first half of 2024. Revenue for the three months ended June 30, 2024, was $7,707,282 compared to $5,549,855 in the prior period, an increase of $2,157,427 or 41%. Gross margin for the three months ended June 30, 2024, was $3,318,336 compared to $1,679,552 in the prior period, an increase of $1,638,784 or 98%. Adjusted EBITDA for the three months ended June 30, 2024, was $2,651,694 compared to $1,115,876 in the prior period, an increase of $1,535,818 or 138%. Revenue for the six months ended June 30, 2024, was $20,033,570 compared to $15,468,187 in the prior period, an increase of $4,565,383 or 30%. Gross margin for the six months ended June 30, 2024, was $10,214,681 compared to $6,778,847 in the prior period, an increase of $3,465,834 or 51%. Adjusted EBITDA for the six months ended June 30, 2024, was $8,989,547 compared to $5,508,558 in the prior period, an increase of $3,480,989 or 63%. Increases in revenue, gross margin and EBITDA for the year, are reflective of increased customer activity in 2024 while maintaining the operating efficiencies of the Company.

• For the six months ended June 30, 2024, the company generated cash flow from operations of $10,635,184 compared to $8,517,478 in the prior year. This change is consistent with the higher activity levels during the year and the growing demand for the natural gas power generation. The Company continues to utilize a combination of cash flow and debt to right-size and modernize its equipment fleet to meet customer demands. During the six months ended June 30, 2024, the Company acquired $9,685,061 of capital assets, primarily for natural gas power generation equipment and facilities, upgrading existing equipment, and meeting specific requests from customers. The Company continues to see its customers switching to natural gas as a cleaner and more efficient alternative to diesel, increasing the demand for natural gas generators and micro-grid packages. Also, the Company purchased land to expand operations and is in the process of constructing a new facility in Fort St. John, BC. The total cost of the project is an estimated $5 million, and the construction work commenced in February 2024. The Company is in the process of obtaining a mortgage on the building. The facility is estimated to be completed by the end of 2024.

• On March 12, 2024, the Company closed a brokered private placement of 8,234,350 units issued at a price of $0.85 per unit for aggregate gross proceeds of $6,999,197. Each unit consists of one common share and one-half common share purchase warrant. Each warrant is exercisable to acquire an additional common share at an exercise price of $0.95 per share for a period of 24 months. The exercise of all warrants will provide the company an additional $4,585,000. This private placement underscores the Company's commitment to efficiently manage capital while continuing to grow and meet customer demands. As of June 30, 2024, 1,014,425 warrants were exercised at $0.95 per warrant, providing $963,704 in cash proceeds.

• During the six months ended June 30, 2024, the Company did not repurchase or cancel shares. Since the initiation of the share buyback program, the Company has purchased and cancelled 11,336,000 shares at a cost of $2,903,646 or $0.26 per share. These shares have a carrying value of $1.41 per share for a total of $15,970,630 which has been removed from the share capital account over the entire share buyback program. The Company renewed its bid on August 24, 2023, with a termination date of August 29, 2024, or such earlier time as the bid is completed or terminated at the option of the Company. The Company has available tax losses of $0.12 per share and has developed a consolidated tax plan to utilize those losses against operating income.

Enterprise Group is pleased to announce that Desmond O'Kell, previously the Senior Vice President and Director, will now serve as the President and Director of the Company. Leonard D. Jaroszuk will continue in his roles as Chairman of the Board and Chief Executive Officer.

About Enterprise Group, Inc.

Enterprise Group, Inc is a consolidator of services-including specialized equipment rental to the energy/resource sector. The Company works with particular emphasis on systems and technologies that mitigate, reduce, or eliminate CO2 and Greenhouse Gas emissions for itself and its clients. The Company is well known to local Tier One and international resource companies with operations in Western Canada. More information is available at the Company's website www.enterprisegrp.ca. Corporate filings can be found on www.sedarplus.ca.

For questions or additional information, please contact:

Leonard Jaroszuk, CEO, or
Desmond O'Kell, President
780-418-4400
contact@enterprisegrp.ca

Forward Looking Information

Certain statements contained in this news release constitute forward-looking information. These statements relate to future events or the Company's future performance. The use of any of the words "could", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Company's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. The Company's Annual Information Form and other documents filed with securities regulatory authorities (accessible through the SEDAR website www.sedarplus.ca) describe the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference. The Company disclaims any intention or obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.

Non-IFRS Measures

The Company uses International Financial Reporting Standards ("IFRS"). EBITDA is not a measure that has any standardized meaning prescribed by IFRS and is therefore referred to as a non-IFRS measure. This news release contains references to EBITDA. This non-IFRS measure used by the Company may not be comparable to a similar measure used by other companies. Management believes that in addition to net income, EBITDA is a useful supplemental measure as it provides an indication of the results generated by the Company's principal business activities prior to consideration of how those activities are financed or how the results are taxed. EBITDA is calculated as net income excluding depreciation, amortization, interest, taxes and stock based compensation.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/219208

FAQ

What was Enterprise Group's (ETOLF) revenue for Q2 2024?

Enterprise Group's revenue for Q2 2024 was $7,707,282, representing a 41% increase from the same period in 2023.

How much did Enterprise Group's (ETOLF) Adjusted EBITDA grow in Q2 2024?

Enterprise Group's Adjusted EBITDA grew by 138% to $2,651,694 in Q2 2024 compared to the same period in 2023.

What was the outcome of Enterprise Group's (ETOLF) private placement in March 2024?

Enterprise Group closed a brokered private placement on March 12, 2024, raising $6,999,197 by issuing 8,234,350 units at $0.85 per unit.

How much did Enterprise Group (ETOLF) invest in capital assets during H1 2024?

Enterprise Group invested $9,685,061 in capital assets during the first half of 2024, primarily for natural gas power generation equipment and facilities.